My five cents, which won't matter much:
art-wise: the red devil is "well rounded" for a kid, a belly which form-wise appears more often with adults.
the female next to him does NOT look like a five-year old. She is at least adolescent (
when looking at my son's classmates, I see a lot of girls who are that thin, but no boys with such a belly - the "fatties" are differently rounded - and I do not intend any body-shaming, this is meant as a way to express my observations, the dads like myself have such front-loaded bellies).
With the basket with biscuits you do have a point. While Biscuit is large, he has not been portrayed as gigantic yet.
The perspective of the late evening on
https://www.goblinscomic.com/comic/page-10-2024 does not help Elli's point either. These two are standing so far in the front, that I assumed they are kids strolling a bit further away from direct supervision.
And the others on the bridge do not seen to be costumed other than "a night out", but definitely not "hell-themed".
They also don't carry sweets/biscuits/... baskets around.
In conclusion I would say the art is at least ambiguous. But I would also come to the conclusion that they're older kids being allowed to wander around on a festive evening.
(And I am not in an American Halloween tradition, I don't see this immediately as a "halloween-style" event, but indeed, this seems to be very close to the intention.)
And it's not a halfling, since Dies Horribly specifically stated that this is a bridge to a Human-made town, and the two costumed NPCs stated that they are from that village. Granted, human-made does not exclude human-made but halfling-inhabited, but I saw no other indication of Halfling-styles.
And actually that the kids will die I consider to be fully within the horrors to be portrayed in this comic. This "spirit gone wrong" ("Junior") is a horror monster.
More so than Mr. Fingers who triggers more the subconscious horror, but Junior is a horror for those thinking it through.
Imagine a monster who heals itself by drinking blood (and further gets stronger from it), and is already very strong.
Before you know how dangerous that thing is, you're too much in the battle to escalate it enough for overwhelming power on your side. And once you're in battle, and blood will keep it surviving, healthy, and even strengthening. And which will go for ANY and ALL blood.
And this is well portrayed by also killing the kids.
I don't expect many survivors in the village, personal expectance is zero.